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Current Accounting Status Determining Business Results At Thanh Son Company Limited.


3.2 Accounting status determines business results at Thanh Son Company Limited.

3.2.1 Main business activities:

3.2.1.1 Sales revenue accounting

a. Sales revenue summary and bookkeeping process

* Sales revenue summary table

Table 3.2: Summary table of sales and service revenue

Unit: VND



STT


Product name, goods

Unit of measure

Selling price

excluding VAT


Total

1

HK galvanized sheet metal (cold)

Kg

1,600,000

1,600,000

2

HK galvanized sheet metal (cold)

Kg

2,200,000

2,200,000

3

HK galvanized sheet metal (cold)

Kg

1,400,000

1,400,000

4

Galvanized sheet metal

Kg

1,454,545

1,454,545

5

Wood chip cement board 2440x1220x8mm

Plate

1,363,636

1,363,636

6

Wood chip cement board 2440x1220x8mm

Plate

909.091

909.091

7

18mm particle board

Plate

2,509,091

2,509,091

8

Color coated steel

Kg

12,377,273

12,377,273

9

Mica 4.5l

Plate

1,136,364

1,136,364

10

Wood cement floor panels 1,220x2,440x16mm

Plate

14,527,273

14,527,273

11

Color coated steel

Kg

2,109,091

2,109,091

12

Aluminum ladder

Meter

1,363,636

1,363,636

13

Galvanized square steel

Kg

7,395,455

7,395,455


Other


359,766,273

359,766,273

TOTAL


410,111,728

410,111,728

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Current Accounting Status Determining Business Results At Thanh Son Company Limited.

Source: Accounting Department of Thanh Son Company Limited


Sales detail book

VAT invoice, receipt, credit note,...

Ledger account 511

* Bookkeeping process


General Journal



Sales summary table




Balance sheet of arising numbers

Financial report

Note:

Daily Record

Record at the end of the month or periodically Check and reconcile

b. Documents used

+ VAT invoice

+ Receipt

+ Notice of receipt

+ Sales contract

c. User account

Account 511 - Sales revenue

- Account 5111 – Sales revenue

- Account 5112 – Revenue from sales of finished products

d. Some typical operations

* On January 22, 2016, the company transported 25kg of galvanized sheet iron to PV Construction Mechanical Advertising Company Limited, the contract value was 454,545


VND, 10% VAT is VND 45,455, VAT invoice number 0000002, code TP/15P, the company has not collected the money yet.

- Original documents attached: VAT invoice number 0000002 (See Appendix 01)

- Based on VAT invoice number 0000002, accountant records Debit account 131: 500,000

Credit account 511: 454,545

Credit account 3331: 45,455

* On January 26, 2016, the company transported 336.60 kg of colored cold-rolled steel to Cuu Long Hotel, the contract value was 11,000,000 VND, 10% VAT was 1,110,000 VND, VAT invoice number 0000005, code TP/15P, the company has not collected the money yet.

- Original documents attached: VAT invoice No. 0000005 (See Appendix 01)

- Based on VAT invoice number 0000005, accountant records Debit account 131: 12,100,000

Credit account 511: 11,000,000

Credit account 3331: 1,100,000

* On January 27, 2016, the company transported 167.90 kg of colored cold rolled steel to Thanh An Trading and Service Company Limited, the contract value was 5,038,182 VND, 10% VAT was 503,818 VND, VAT invoice number 0000006, code TP/15P, the company has not collected the money yet.

- Original documents attached: VAT invoice number 0000006 (See Appendix 01)

- Based on VAT invoice number 0000006, accountant records Debit account 131: 5,420,000

Credit account 511: 5,038,182

Credit account 3331: 503,818

* On January 30, 2016, the company transported 83kg of HK galvanized sheet steel (cold) to Tuan Phuc Mechanical Company Limited, the contract value was 1,659,091 VND, 10% VAT was 165,909 VND, VAT invoice number 0000010, code TP/15P, the company has not collected the money yet.

- Original documents attached: VAT invoice number 0000010 (See Appendix 01)

- Based on VAT invoice number 0000010, accounting records


Debit account 131: 1,825,000

Credit account 511: 1,659,091

Credit account 3331: 165,909

Total revenue generated in the first quarter of 2016 was 410,111,728 VND

Transfer of sales revenue and service provision Debit account 511: 410,111,728

Credit account 911: 410,111,728

e. Accounting books

* Basis for recording

Every day when there is an economic transaction related to revenue, based on the original documents (VAT invoices, receipts, etc.), the accountant will enter it into the computer. According to the set recording order, the data will be automatically updated in the list of goods sold, detailed account 511, general journal account 511, general ledger account 5111 and related books. At the end of the period, transfer to account 911 to determine business results.

- Detailed account book 511 - Sales revenue and service provision (See Appendix 01)

- Ledger account 511 (See Appendix 01)

* Comment

Because the company's main activities are production and trade, revenue from selling products, goods and providing services is very important to the company. Therefore, recording revenue accurately, correctly and promptly is also a decisive factor for the survival of the company. It not only compensates for the costs incurred but also contributes to increasing the company's profits, increasing the company's operating efficiency, and increasing the company's competitiveness.

Revenue is recognized when the volume of products, goods, and services is determined to be consumed, that is, when they are delivered to customers or when the service is completed and paid or accepted by the customer. The basis for calculating revenue in the period is the amount recorded on the sales or service provision invoice.

As a company that applies VAT payment by deduction method, sales revenue does not include VAT.

Regarding the implementation of accounting regime: information on VAT invoices and receipts is legal, valid, and in accordance with the prescribed book form.


Regarding accounting organization: perform general journal entry, ledger entry, detailed account book 511.

3.2.1.2 Accounting for cost of goods sold

a. Summary table of cost of goods sold and recording process

Table 3.3: Summary of cost of goods sold


STT

Product name, goods

Unit of measure

Total amount

1

HK galvanized sheet metal (cold)

Kg

1,443,264

2

HK galvanized sheet metal (cold)

Kg

1,984,487

3

HK galvanized sheet metal (cold)

Kg

1,262,856

4

Galvanized sheet metal

Kg

1,324,774

5

Wood chip cement board 2440x1220x8mm

Plate

1,123,182

6

Wood chip cement board 2440x1220x8mm

Plate

898,545

7

18mm particle board

Plate

912,000

8

Wood cement floor panels 1,220x2,440x16mm

Plate

1,278,935

9

Color coated steel

Kg

1,970,733

10

Aluminum ladder

Meter

205,263

11

Galvanized square steel

Kg

6,840,288


Other


331,810,902

TOTAL


351,055,229

Source: Accounting Department of Thanh Son Company Limited

Production and business cost book account 632

VAT invoice, warehouse delivery note, etc.

Ledger account 632

Balance sheet of arising numbers

Financial report

* Bookkeeping process



General Journal



Summary table of production costs




Note:

Daily Record

Record at the end of the month or periodically Check and reconcile

b. Documents used

+ VAT invoice

+ Warehouse delivery note

c. User account

Account 632 – Cost of goods sold

d. Some typical operations

* On January 21, 2016, the company sold to Asia Medical Equipment Company Limited 112.20 kg of color-coated cold-rolled steel, unit price 28,033.18 VND/kg, according to VAT invoice No. 0000001 and warehouse delivery note.

- Original documents attached: Warehouse delivery note No. 25 (See Appendix 02)

- Based on warehouse delivery note No. 25, accountant records: Debit 632: 3,145,323

There are 155 : 3,145,323

* On January 23, 2016, the company sold 10 4.5mm MDF boards to KWONG LUNG-MEKO LLC, unit price 67,810.2 VND/board, according to VAT invoice No. 0000003 and warehouse delivery note.

- Original documents attached: Warehouse delivery note No. 31 (See Appendix No. 02)

- Based on warehouse delivery note No. 31, accountant records: Debit 632: 678,102

There are 1561 : 678,102

* On January 26, 2016, the company sold to Cuu Long Hotel 366.60 kg of color-coated cold-rolled steel, unit price 28,033.18 VND/kg, according to VAT invoice number 0000005 and warehouse delivery note.

- Original documents attached: Warehouse delivery note No. 38 (See Appendix No. 02)

- Based on warehouse delivery note No. 38, accountant records: Debit 632: 10,276,964

There are 155 : 10,276,964


Total cost of goods sold incurred in the first quarter of 2016 was 351,055,229 VND

Transfer cost of goods sold Debit account 911: 351,055,229

Credit account 632: 351,055,229

e. Accounting books

* Basis for recording

Based on orders, VAT invoices, warehouse delivery notes, accountants enter data into the computer to calculate the cost of goods sold, the software will automatically update data into the general ledger account 632, general ledger account 632. At the end of the period, transfer to account 911 to determine business results.

- Detail book of account 632 - Cost of goods sold (See Appendix No. 02)

- Ledger account 632 (See Appendix 02)

* Comment

The company's cost of capital is determined using the weighted average method.

Cost of goods sold = Number of products sold x weighted average unit price.

Weighted average unit price = (Opening inventory value + Import value during the period) / (Opening inventory quantity + Import quantity during the period)

Regarding the implementation of accounting regime: information on VAT invoices and warehouse delivery notes must be legal, valid, and in accordance with the prescribed book form.

Regarding accounting organization: perform general journal entry, ledger entry, detailed account 632 book entry.

3.2.1.4 Accounting for cost of sales

a. Summary table of selling expenses and recording procedures

Table 3.4: Summary of selling expenses


STT

Expense

Amount

1

Depreciation of fixed assets

1,696,429

2

Payroll

4,980,000

3

Depreciation of fixed assets

1,195,200

4

Depreciation of fixed assets

199,200

5

Tool allocation

66,400


Other

15,554,649


TOTAL

23,691,878

Source: Accounting Department of Thanh Son Company Limited


Production and business cost book account 641

VAT invoice, receipt, credit note,...

Ledger account 641

* Bookkeeping process


General Journal



Summary table of cost of sales




Balance sheet of arising numbers

Financial report

Note:

Daily Record

Record at the end of the month or periodically Check and reconcile

b. Documents used

+ Fixed asset depreciation table

+ Tool distribution table

c. User account

Account 641 – Cost of sales

- Account 6411 – Employee costs

- Account 6414 – Fixed asset depreciation expense

- Account 6418 – Other cash expenses

d. Some typical operations

* On January 31, 2016, depreciation of fixed assets of the sales department, amount

1,696,249 VND, fixed asset depreciation table.

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